Are You Part Of The $62 Billion Loss Due To Poor Customer Service?

I love reading studies and benchmark reports. The statistics and facts give a snapshot of interesting and often relevant trends. My favorite report from last year was issued by New Voice Media, which reported that $62 billion of business was lost due to poor customer service. That was an increase of almost 50% from a similar report it released two years prior.

A new "Customer Service Benchmark Report" released by SuperOffice also revealed some interesting and compelling statistics. I would even call their findings scary. As you read this information, you are going to hope you are on the right side of the statistics.

The report starts by citing past research that states 80% of businesses believe they provide excellent customer service, but only 8% of customers agree. I’ve always been a little surprised by those numbers, but I know that while the numbers may not apply to every type of business and industry, the basic concept holds true. There is a definite disconnect between the leadership in many companies and what’s happening on the front line with customers. Is it as serious as the numbers indicate? In B2C businesses, the numbers may be accurate.

The people at SuperOffice were a little surprised as well, so they conducted a study assessing 500 different companies from different industries. They started by sending an email to each of these 500 companies that asked two questions:

1. Do you have a phone number I can call you on?

2. Where can I find pricing information on your website?

Based on their responses, which measured speed, quality and tone, they rated the companies. Here are some of the “scary” numbers I mentioned above.

• 41% of companies did not respond to the email

• 99% of companies did not follow up after the interaction with the “customer”

• Only 11% of companies answered both questions in the first reply

• Average response time to handle an email was 15 hours

Look at those stats and hope that they don’t apply to your organization. The bar is low. It doesn’t seem to be tough to beat out the competition. But, keep in mind there are some companies that have raised the bar. I’ve written about 1-800-Flowers and how its response times are less than five minutes. If you’re in the floral business, a response time of 15 hours won’t cut it. Maybe not even 15 minutes!

So, let’s look at these statistics individually.

Forty-one percent of companies did not respond to the email – You have to respond to email! If this happens to be the first attempt by the customer to reach out about a problem, and you don’t respond, the customer’s next step might be a public rant about your service on a social channel. Or, maybe they will simply give up on you and choose to do business elsewhere. (Now you’ve just joined the 62 Billion Dollar Club mentioned in the first paragraph.)

Ninety-nine percent of companies did not follow up after the initial interaction with the customer – A follow-up to a conversation is the perfect opportunity to “tie a bow” around the package, the package being how well you handled the customer’s request, question or complaint. Follow-up is an extra touch point that can add value to the relationship. Of the 500 companies surveyed, only 41% responded, and of those, only three followed up after the interaction. Two of the companies sent a survey to ask how they did. Only one company followed up to simply ask if the customer was happy. Once again, the bar is low … very low!

Only 11% of companies answered both questions in the first reply – The actual results of the survey were that 11% answered both questions in full and 9% answered just one question. Another 6% responded but didn’t answer either question. Here is the point: when dealing with customers on the phone, the goal should be what is known as “one-call resolution.” The customer should not have to call back a second time to get a question answered or problem resolved. The same is true for email or any other form of text communication. There may be an exchange of emails, but it should all be part of the same incident. The customer shouldn’t have to contact you a second time, virtually starting over, for the same problem.

Average response time to handle an email was 15 hours – Let me put it this way. If I wanted my question answered in 15 hours, I would have waited 15 hours to ask the question. Take a lesson from the previously mentioned 1-800-Flowers. Respond quickly. Maybe five minutes is not a realistic goal for everyone, but what do you think is reasonable? Twenty minutes? Maybe 30? If you think 15 hours is reasonable, then be ready for the consequences, which will be angry and frustrated customers. Or, what might at that point be referred to as former customers.

My response to all of these stats was the same, “Are you kidding me?!”

I’m an optimist. While the numbers in this study reveal some unfortunate facts about customer service, there are some excellent companies that could score a perfect 10 in most, if not all, of their interactions. Even excellent companies have problems and complaints on occasion. But when they do, their system and trained employees know how to turn a complainer into an advocate. These great companies are winning. Others are trying to keep up or catch up.

Yes, you need to be competitive and offer a quality product. You might even need to be somewhat competitive in price, although not always. However, if you want to be successful, you have to be willing to step up with a level of service that is in line with what the customer expects. And there are some basics that can’t be ignored. Responding to a customer’s question in an email is about as basic as it gets. So, if you’re not already doing it, make that step one to begin developing a better customer service experience.

Shep Hyken is a customer service and experience expert, keynote speaker and New York Times and Wall Street Journal bestselling author. Follow Shep on Twitter: @Hyken.